Will the world witness another economic recession

Friday, August 19, 2011

Will the world witness another economic recession

The world has moved into a precarious position, and over the last two years, the growth witnessed in US have now again begun to recede. United States home sales and manufacturing units have witnessed a retarded growth, which has led many economists to believe that things could go wrong in the economic front. The European markets too, have shown no signs of improvement in the year 2011, and now the fear is looming large among the economists that another global recession is on the cards. 

The fall in US credit ratings has not helped either. When two of the world's major economic regions are stuttering to come to terms with their own economy, the world will never have a sustained growth. The world’s 3rd largest economy has its own problems, as Japan is finding tough to deal with the recent Tsunami after affects in its region. The loss in Japan has fuelled economic crisis and led to the belief that economic recession is on the cards. There is very little chance that things will improve in the near future.

European market debts are eating up European banks. They now face a situation, where they have no choice, but have to bear higher interest for loans that they have taken to sustain the daily activities. American home sales continue to drop, and if the trend continues, then the economic crisis will translate into a global recession within two years from the time it was considered to have left. 

The two years of growth after the recession has not done enough. The most worrying factor is Europe’s inability to deal with the debt crisis. In United States, jobs have been created, but are these jobs enough for the unemployed people who are looking at the unemployment benefits for their daily livelihood. The numbers of jobless people who are dependent on unemployment benefits are rising each week, and that is a sign of job crisis. Though, the risks for a global recession are not very high, but it could turn worse, if the current trend continues for some more time.

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